OK, I should start by saying I realize that actual hard data won't make a whit of difference to the faith-based economists of the Bush administration.
But for those in the reality-based community, a piece by Jonathan Rauch in the June Atlantic provides clear confirmation that the Repugs' cherished tax-cutting policy doesn't work. And the source? Our friends at the libertarian Cato Institute.
It's a fascinating story...
"Starve the Beast," as you know, is the notion first proposed by Reagan and taken to extreme by the Bushites that you don't have to actually cut spending to shrink the government. Just (as Reagan said) "cut the allowance" of the spendthrift government by slashing taxes, and spending cuts will follow as night follows day.
At least, that's the theory. But William Niskanen, the straight-arrow chairman of the Cato Institute, has called bullshit. In fact he has shown that, historically, government spending increases when taxes are cut.
But, but, but, how can this be? It's a classic perverse consequence: cutting taxes without cutting spending decreases the apparent cost of government. And, as everyone knows, when you put something on sale, people buy more of it.
But what about the deficit? Niskanen analyzed data from 1981 to 2005 and found no sign that deficits have ever acted as a constraint on spending. He also found an "equilibrium point" where taxes neither increase nor decrease spending: 19% of GDP. Currently, taxes are at 17.8%, so it's not surprising that spending has risen under Bush.
This destroys the R's entire "Starve the Beast" argument. Here in the real world, the way to limit the growth of government is to force politicians, and therefore voters, to pay for all the government they use--not to give them a phony discount.
Rauch's concluding paragraph:
"The conservative movement is in no position to accept or even acknowledge those implications, now that tax cutting has become the long pole in the Republican tent. Therein lies the element of tragedy. By turning a limited-government movement into an anti-tax movement, conservatism has effectively gone into business with the Big Government that it claims to oppose. It is not starving the beast. It is fueling the beast's appetite. And the beast has a credit card."